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Data. The New Oil

When The Economist said "data is the new oil," did they mean what we think they meant, or did they mean there would be slogging involved?

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Data. The New Oil

 

A few weeks ago, during an online altercation between various “experts” in the ICT fraternity in Kenya about whether data was the new oil, one brilliant observer quipped “more like the new snake oil!” which was an apt response to this overhyped and under analysed buzzword.

For those unfamiliar with the phrase “snake oil,” it refers to a solution for all ailments that was originally peddled across the American wild wild west (www) and has since been propagated to the present day in areas as diverse as hair restoration supplements to vitamins in clothing detergents. The fact that it has crossed over to the IT space is an indication that the ICT industry has now gone mainstream with everyone and their uncle free to make wild accusations on solutions that can solve all our problems from a lack of height to reviving a dead business model.

The so-called big tech companies realised ages ago that the collection of data was the basis for leveraging it into the new oil while the rest of us are being convinced that you can collect data today and be able to leverage it tomorrow for radical and innovative insights into how to turn your business around. If a company like Facebook had not collected our basic data there was no way they could have been able to leverage the reach of WhatsApp by tying our phone numbers to our email addresses and then cross-reference that to identify our friends and relatives allowing them to target advertisements to a homogenous group.

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The little notice FB recently released and that caused a global outcry come exodus was nothing more than to formalise what they have been doing ever since they bought WhatsApp, a company that had next to zero in revenue. All the best to those moving over to Signal and Telegram hoping they will forever protect the data we share with them willingly.

Back to the snake oil issue, if an organisation did not set up a data policy 10 years ago, it is unlikely that doing so today soon after purchasing a data analysis tool will help much in turning the data into oil leave alone nylon.

Taking the analogy of the dark and thick stuff that we pump out from unfathomable depths, let us remember that it took many centuries as well as a lot of pressure to give it its qualities. Also, we need to remember that the oil on its own is useless and needs to be refined to make it commercially viable. Therefore, if you do not already have years of well collected and stored data, please avoid talking about or listening to presentations on how data is the new oil as you have none to process.

Instead, what you need to do is ask about how you can start to collect data today. Unfortunately, you will have to contend with the General Data Protection Regulation (GDPR) hurdle that was recently erected by the incumbents who already have mountains of the stuff stashed away.  A quick example is telcos who are today able to bring to market products based on insights from the data they have been freely collecting for decades. While on the other end, we have financial institutions and insurance companies who never collected any of the data that passed through their systems and are now captive to the former.

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So, any discussion of data being the new oil with someone who has no data makes it a snake oil conversation. Overcome the data collection phobia so as not to be left behind by the next data rush.

This article was first published in the February 2021 issue of CIO East Africa magazine. 

Do you have a story that you think would interest our readers? write to us editorial@cio.co.ke

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